CertiK says crypto exchanges should set dollar caps on hot wallets

Key points

• Gate reported 88.26% of its assets in cold storage, while Coinbase said more than 99% of customer assets are kept offline.
• South Korea requires at least 80% of customer crypto by value in cold storage, Singapore 90%, Japan 95% and Hong Kong 98% for licensed platforms.

Crypto exchanges should set hard dollar caps on hot-wallet holdings instead of judging security by cold-storage ratios alone, the cybersecurity firm CertiK told Cointelegraph. The recommendation followed several exchanges disclosing their offline holdings to reassure customers after the record Binance hack, which targeted hot wallets.

Gate said 88.26% of its total assets sat in cold storage, while Coinbase reported keeping more than 99% of customer assets offline. CertiK's research team said cold storage is a useful gauge of online exposure but not a security score on its own. It added that the benefit of higher cold-storage levels shrinks at very high percentages, and that rigid ratios can slow withdrawals, prompt rushed transfers and concentrate risk in key-management systems.

Regulators already set floors. South Korea requires crypto service providers to hold at least 80% of customer assets by value offline, Singapore's guidelines call for 90%, Japan's framework 95% and Hong Kong's baseline for licensed platforms 98%.

Binance said in the week of 2 November it had replaced about 98% of the tokens affected by the hack and would absorb the losses, with the remainder less liquid and slower to acquire.

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